The PowerShares U.S. Dollar Bull ETF (NYSEARCA:UUP) is up 0.9% premarket after diving 2% yesterday following the Fed's surprisingly dovish outlook.

The euro is particularly weak, down 1.5% to $1.07 after climbing over $1.10 in very fast trade after the close yesterday. The pound (NYSEARCA:FXB) is down 0.6%, the yen (NYSEARCA:FXY) 0.5%, loonie (NYSEARCA:FXC) 1%, swissie (NYSEARCA:FXF) 1.3%, and aussie (NYSEARCA:FXA) 1.4%.

A nice-sized rout in the overbought dollar following the unexpected Fed dovishness turns into something more after the bell, with the euro (NYSEARCA:FXE) flying all the way past $1.10 vs. just above $1.08 at 4 ET (prior to the Fed news, it was around $1.0650). In the last few minutes the common currency has returned to $1.0914.

The other major currencies also saw big post-4 ET moves, but not of the euro's magnitude.

The Dollar Bull ETF (NYSEARCA:UUP) is lower by 0.7% after hours, following a 2% dive in the day session.

It's a rare selloff for "King Dollar" as the FOMC drops "patient" from its policy statement, but otherwise lets the doves loose as it cuts back on its forecast for GDP growth, inflation, and the pace of rate hikes.

The dollar (UUP-1.1%) is lower across the board, particularly vs. the euro (FXE+1.3%), swissie (FXF+1.8%), aussie (FXA+1.3%), and loonie (FXC+0.4%).

The pound (FXB+0.1%) and yen (FXY+0.6%) are also notching gains vs. the greenback.

"The Fed is intent on being a blockhead," says Jeff Gundlach, arguing the U.S. central bank is about to make the same mistake the ECB did in 2011 when it hiked interest rates. The ECB found itself quickly reversing course as the higher rates helped precipitate a blow-up in the euro-periphery.

"Don't do it," he warns those who are thinking about going contrarian and shorting the dollar (UUP, UDN). Currency trends, he says, tend to go on and on. "The dollar, which has been a world leader, is going to be a world leader."

The euro fell to a fresh 12-year low on Wednesday, extending a broad decline just days after the ECB launched its €1T bond-buying program, while the dollar index soared to its highest in more than 11 years at 98.95, buoyed by expectations that the Fed could soon lift U.S. interest rates.

Nearly all now believe the FOMC will remove the word "patient" from its policy statement after its March 17-18 meeting, opening the door for a rate increase in June.

The greenback is higher across the board as the Fed goes into the blackout period ahead of the March 17-18 meeting at which nearly all now believe the FOMC will remove the word "patient" from its policy statement, thus putting a rate hike on the table at all future meetings.

The dollar is showing the most strength against the euro, aussie (NYSEARCA:FXA), and swissie (NYSEARCA:FXF) - up about 1% vs. all three.

With creations allowed again, the funds are no longer susceptible to big premiums such as those seen in closed-end funds, writes Chris Dietrich. Still watch closely, at least for today. PowerShares: "It is possible that the market value of the funds’ shares may be affected by the resumption of issuances of shares of the funds, and the market value may be higher or lower than the intraday indicative value of the shares.":

Core CPI gained 0.2% in January, double expectations, even as the oil-influenced headline number tumbled 0.7%.

The only thing barely holding back Fed rate increases at this point is too-low inflation, and if core CPI is going to start printing 0.2% on a monthly basis, markets probably ought to start pricing in at least a small series of rate boosts.

The dollar bull ETF (NYSEARCA:UUP) is up 0.6% premarket, with the greenback nicely in the green against the euro (NYSEARCA:FXE), yen (NYSEARCA:FXY), loonie (NYSEARCA:FXC), pound (NYSEARCA:FXB), swissie (NYSEARCA:FXF), and aussie (NYSEARCA:FXA).

The move comes as PowerShares (a unit of IVZ) takes over management of the funds from what had been a joint arrangement with Deutsche Asset & Wealth Management.

PowerShares: "There may be increases in the spread they quote between offers to buy and sell shares ... In addition, there could be a significant variation between the market price at which shares are traded and the shares’ net asset value ... Invesco believes that any potential impact to the market in shares of the funds will not extend beyond the time of the suspension.”

Slipping under $1,200 per ounce for the first time since the start of the year, gold jumps by about $15 to $1,211 after the FOMC minutes suggest a June rate hike is far less a certainty than recent Fed speakers might have one believe.

The dollar (UUP) is flat on the session, but has given ground since the minutes' release at 2 ET.

The PowerShares DB US Dollar Bullish Fund (Symbol: UUP) is based on the Deutsche Bank Long US Dollar Index (USDX®) Futures Index™ (DB Long USD Futures Index). The Index, which is managed by DB Commodity Services LLC, is a rules-based index composed solely of long USDX® futures contracts. The USDX® futures contract is designed to replicate the performance of being long the US Dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. You cannot invest directly in an index. Ordinary brokerage commissions apply.
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